LONDON (Thomson Financial) - The telecoms regulator on Thursday fined the Greek unit of UK mobile giant Vodafone 19.1 mln eur for violating network regulations in a wire-tapping scandal that rocked the country last year.

The fine is the second handed to Vodafone Hellas over the case after a 76 mln eur penalty levelled by Greece's communication privacy watchdog last December.

Some 100 Vodafone cellphones in February 2006 were found to have been compromised by an illicit network that tapped sets used by Greek Premier Costas Karamanlis, his wife and several ministers from June 2004 to March 2005.

The tapping used software slipped into Vodafone's network by unknown perpetrators to illegally activate an Ericsson-made module permitting call interception.

On Thursday, the national telecommunications regulator EETT accused Vodafone of breaching regulations on the protection of telecommunications privacy, network maintenance and quality, and consumer protection.

The company rejected last December's fine as 'illegal, unfair and baseless.'

A Greek parliament committee collecting evidence on the case last November noted the involvement of three employees of telecoms giants Ericsson Hellas and Vodafone Greece, identified only by their initials.

'The whole system could not operate without Ericsson know-how and without access from within (Vodafone),' the report said.

The Greek branch of Swedish telecom equipment giant Ericsson has also been fined 7.36 mln eur over the case.

The parliamentary committee did not rule out the involvement of other people operating outside Greece.

The Greek justice department has opened an investigation into the case but nobody has yet been charged.

Days before the affair came to light, a senior Vodafone expert was found hanged inside his home.

The death of Costas Tsalikidis, manager of Vodafone Greece's network planning section, was linked to the case and his family suspects he was murdered.

Telecoms giant Vodafone was continuing to rise after yesterday's impressive surge following the confirmation that it is in talks about selling its 45% stake in Verizon Wireless to US partner Verizon. The sale could generate up to $130bn for the UK group, reports have suggested.

What would the remnants of Vodafone be worth? http://valueshare.co.uk/current-portfolio/vodafone/vodafone-loses-verizon-stake-left/272/

NEW YORK/LONDON (Reuters) - Verizon Communications and Vodafone plan to announce a $130 billion deal on Monday that will give the U.S. telecom giant complete control of Verizon Wireless, subject to final board approval, people familiar with the matter said.

Vodafone said in a statement late on Sunday it was in advanced talks with Verizon to sell its 45 percent stake in the joint venture for $130 billion, comprising cash and common shares, but that there was no certainty an agreement would be reached.

"A further announcement will be made as soon as practicable," it said of the deal to exit the largest mobile operator in the U.S..

Under the terms of the proposed agreement, Vodafone would get $60 billion in cash, $60 billion in Verizon stock, and an additional $10 billion from smaller transactions that will take the total deal value to $130 billion, two of the people familiar with the matter said on Saturday.

To fund the cash portion of the deal, Verizon has lined up as much as $65 billion in financing from four banks: JPMorgan Chase & Co, Morgan Stanley, Barclays Plc and Bank of America Merrill Lynch, they said. The banks have committed to the financing which is expected be split evenly among the four, two people said.

A full announcement of the terms is expected to come after the stock market closes in London on Monday, after the board of Verizon meets earlier in the day to vote on the proposed transaction, people familiar with the matter told Reuters.

Vodafone's board was scheduled to meet on Sunday to approve the deal, the people said. Both groups declined to comment.

If the deal is concluded, it will end one of the longest-running corporate standoffs, which has at times seen both partners seek to buy out the other in times of weakness. For Verizon, it means that it no longer has to share the billions in cash generated by Verizon Wireless.

On the Vodafone side, Chief Executive Vittorio Colao will get a war chest of cash to reward shareholders and potentially carry out acquisitions to strengthen the group's European and emerging market operations.

All the people asked not to be identified because the matter is not public.

HIGHLY PROFITABLE

An agreement over Verizon Wireless would mark the culmination of on-again, off-again discussions going as far back as 2004, when Vodafone bid for AT&T Inc's wireless business in a move that would have required it to shed its Verizon Wireless stake.

The British company lost that bid and has since held on to the Verizon Wireless stake for its exposure to the highly profitable U.S. wireless market, saying it would only sell if Verizon offered a price that was more valuable to its shareholders than the status quo.

At $130 billion, it would be the third-largest corporate deal of all time.

A top 10 Vodafone investor told Reuters last week that $130 billion would be "a good price" that shareholders would welcome.

"Colao's done a good job over the last five years. He's done well not to have sold the U.S. sooner. There were people calling for him to sell the U.S. business three or four years ago and clearly it's been the right thing to do not to do that because it's grown in value hugely over that time.

"Taking the big picture, I think the management has done a good job and if they get the mooted price for Verizon they'll be treated as heroes."

Talks picked up in earnest a few weeks ago, as Verizon grew concerned that its window of opportunity was closing, with interest rates due to rise and its own stock price declining.

That prompted Verizon to raise the offer price from the $100 billion it had initially floated to around $130 billion, sources have said.

Even after the bump in price, the deal is expected to be accretive to Verizon's earnings, one of the sources said.

Another hindrance to a deal has been the possibility of a huge tax bill for Vodafone from the sale, based on Verizon Wireless' massive growth since it was established. But the sources said the deal would be structured in such way that Vodafone's tax bill could be cut to around $5 billion.

A deal would add to the spate of telecom acquisitions this year in Europe and the U.S.. Most recently, Japan's SoftBank Corp took control of Sprint Nextel Corp, the No. 3 U.S. wireless provider, in a $21.6 billion deal that could make the U.S. market more competitive.

Although overall M&A activity remains lower than last year at this time, the telecom sector has been a bright spot of deal-making. According to Thomson Reuters data, telecom deals were up 36 percent this year, with 358 deals worth $60.9 billion, not including the potential Verizon-Vodafone deal.

RESPONSE TO MEDIA SPECULATION

Vodafone confirms that it is in advanced discussions with Verizon Communications Inc. regarding the disposal of Vodafone's US group whose principal asset is its 45% interest in Verizon Wireless for US$130 billion. The consideration would substantially comprise a mixture of Verizon common stock and cash.

There is no certainty that an agreement will be reached. A further announcement will be made as soon as practicable.

LONDON (Reuters) - Verizon Communications was poised on Monday to take full control of its U.S. wireless business with a $130 billion deal to buy out Vodafone and end a decade-long corporate standoff.

The British firm said late on Sunday it was in advanced talks with Verizon to sell its 45 percent stake in the Verizon Wireless joint venture for cash and common shares in what would be the world's third-largest deal of all time.

People familiar with the situation told Reuters they expect a full announcement to come after the London stock market closes on Monday, and after the board of Verizon meets to vote on the proposed transaction for the biggest mobile operator in the United States.

The move to sell Verizon closes a heady expansionist chapter for one of Britain's most famous companies, which grew rapidly over the last 20 years through a spate of aggressive deals to take its red brand into more than 30 countries across Europe, Africa and India.

The world's largest deal, a $203 billion hostile takeover of Germany's Mannesmann in 2000, made Vodafone the company it is today.

The new Vodafone will be smaller, less profitable and more reliant on its core, mature European assets but it is expected to use the windfall to rebuild via smaller acquisitions and higher network investments.

Speculation has already begun that Vodafone could itself become a bid target, and news of the pending deal sent its shares up 4 percent to a more than 12-year high in early London trade on Monday.

Under the terms of the proposed agreement, Vodafone would get $60 billion in cash, $60 billion in Verizon stock, and an additional $10 billion from smaller transactions that will take the total deal value to $130 billion, two of the people familiar with the matter have told Reuters.

To fund the cash portion of the deal, Verizon has lined up as much as $65 billion in financing from four banks: JPMorgan Chase & Co, Morgan Stanley, Barclays Plc and Bank of America Merrill Lynch, they said. The banks have committed to the financing which is expected be split evenly among the four, two people said.

INCREASING PRESSURE

The news that the two sides are nearing a final agreement follows years of speculation as to when and whether Vodafone, the world's second largest mobile operator, would exit the highly successful business.

Vodafone entered the United States in 1999 through a series of deals that resulted in the formation of Verizon Wireless in 2000, with Verizon Communications holding 55 percent of the company and Vodafone the rest.

But the two sides clashed almost immediately and the partnership has over the years been fraught with difficulties, with both partners at times seeking to buy out the other in times of weakness.

Verizon at one point withheld dividends from Vodafone for six years in an effort to force the British group out of the company, a stance that was first resisted by Arun Sarin who led the company from 2003 to 2008 and then by current boss Vittorio Colao.

Their resistance, often in the face of investor demands for a sale, may prove to have been a masterstroke. Verizon Wireless became the largest operator in the U.S., a growing market that boasts high margins and high prices compared with Europe.

For Verizon, a deal means it no longer has to share the billions in cash generated by Verizon Wireless and will in the long run be better able to compete in a country that looks set to turn more competitive.

Deal done, but no details as yet - Vodafone confirms Verizon stake sale

A bit more from reuters.

Verizon, Vodafone say agree to $130 billion Verizon Wireless deal

(Reuters) - Verizon Communications Inc said on Monday it has agreed to buy out Vodafone Group Plc's 45 percent stake in Verizon Wireless for $130 billion, capping its decade-long effort to win full control of the most profitable mobile service provider in the United States.

Under the terms of the deal, Vodafone would get $58.9 billion in cash, $60.2 billion in Verizon stock, and an additional $11 billion from smaller transactions that would take the total deal value to $130 billion, Verizon said in a statement.

The deal marks the third-largest announced acquisition in corporate history and British telecom giant Vodafone's exit from the large but mature U.S. mobile market.

VODAFONE TO REALISE US$130 BILLION FOR ITS 45% INTEREST IN VERIZON WIRELESS

US$84 BILLION EXPECTED RETURN TO SHAREHOLDERS

£6 BILLION ORGANIC INVESTMENT PROGRAMME TO ENHANCE NETWORK AND SERVICE LEADERSHIP

Key highlights
•

Vodafone announces that it has reached agreement to dispose of its US group whose principal asset is its 45% interest in Verizon Wireless ("VZW") to Verizon Communications Inc. ("Verizon" - NYSE: VZ), Vodafone's joint venture partner, for a total consideration of US$130 billion (£84 billion).
•

The consideration1 comprises:
-

US$58.9 billion (£38.0 billion) in cash;
-

US$60.2 billion (£38.9 billion) in Verizon shares2;
-

US$5.0 billion (£3.2 billion) in the form of Verizon loan notes;
-

US$3.5 billion (£2.3 billion) in the form of Verizon's 23% minority interest in Vodafone Italy; and
-

US$2.5 billion (£1.6 billion) through the assumption by Verizon of Vodafone net liabilities relating to the US Group.
•

The VZW Transaction represents an attractive valuation of 9.4x EV / LTM EBITDA and 13.2x EV / LTM OpFCF.
•

Vodafone intends to implement a new organic investment programme, Project Spring, to establish further network and service leadership through additional investments of £6 billion over the next three financial years.
•

At completion, Vodafone shareholders are expected to receive all the Verizon shares and US$23.9 billion of cash (the "Return of Value") totalling US$84.0 billion (£54.3 billion), equivalent to 112p per share and representing 71% of the Net Proceeds.
•

Vodafone expects that strong free cash flow generation will continue to underpin shareholder returns. The Board, therefore, intends to increase the total 2014 financial year dividend per share by 8% to 11p, and intends to grow it annually thereafter.
•

Subject to the satisfaction of certain conditions precedent, the Transactions are expected to complete in Q1 2014.

It seems like the deal has been struck at $135 billion and Vodafone has released some details. The total deal is valued at £1.12 per share. $60.2 Billion of this will be in shares and will be fully distributed to Vodafone shareholders. A further $23.9 billion will be distributed to shareholders as a special dividend. The rest of the proceeds will be used by Vodafone to reduce debt and for business investment. Vodafone seem very positive about the prospects for the remaining group and have announced that they will raise the dividend for next year by 8% to 11p. This seems amazing at the current share price of £2.13 after the Verizon stake that values the rest of the company at £1.01 with a dividend of 11p. That equated to a yield of 10.89%. I would suggest that if the dividend is reliable that they yield could be at least halved which would mean the value of the remaining stake would be doubled to £2.02. When you add the Verizon stake of £1.12 you could argue that Vodafone’s price should be £3.14 which is a significant premium to the current price.

Vodafone has announced a presentation will be held tomorrow so hopefully there will be more information then and if anything significant I will write another update.

Today's "Targets".


HSBC Overweight 222.48 230.00 230.00 Retains

Exane BNP Paribas Underperform 222.48 202.00 202.00 Reiterates

Nomura Buy 222.48 230.00 230.00 Reiterates

Jefferies International Hold 222.48 216.00 216.00 Reiterates

I've taken a daily long position, have VOD as equity also.

Verizon markets $61 billion bridge loan for Vodafone deal: sources

NEW YORK | Mon Sep 2, 2013 10:23pm EDT
(Reuters) - Verizon Communications Inc (VZ.N) has started syndicating the $61 billion bridge loan backing its $130 billion buyout of Vodafone Group's (VOD.L) stake in its U.S. wireless business, banking sources said, adding that some of the loan may actually be drawn upon due to its huge size.

The 364-day billion bridge loan will be refinanced with a permanent capital structure consisting of $49 billion of corporate bonds and $14 billion of loans, sources told Thomson Reuters. The loans will include a $2 billion revolving credit and $12 billion of term loans.

The massive bridge loan is being seen by many banks as a rare opportunity to make money from investment-grade lending. Underwriting fees for bridge loans are generally richer than those paid for more routine refinancings and fees increase further in the rare cases where bridge loans are drawn upon.

Same here Shortie - same yesterday.

Deutsche Bank Buy 206.20 202.50 217.00 217.00 Reiterates

US disposal & cash return both highlight non-US value

Thanks skinny. Merrill Lynch have VOD as a buy and valuation 240p

vodafone true Value £3?

http://valueshare.co.uk/current-portfolio/vodafone/vodafone-sale-agreed-true-value-3/276/

£3 is a bit rich given current figures..

Vodafone: Citi moves target from 230p to 235p and stays with its buy recommendation

UPDATE ON VODAFONE OFFER FOR KABEL DEUTSCHLAND

KEY HIGHLIGHTS

• Deadline to tender into the offer is Wednesday, 11 September 2013, 24.00 hours (Frankfurt am Main local time)

• All offer terms and conditions remain unchanged and will not be amended

• Merger clearance required by the European Commission only